The Power & White District is doing good

[Titty Meat]

http://www.kansascity.com/2010/07/13...-need-big.html


Power & Light District will need big subsidies from city
By KEVIN COLLISON
The Kansas City Star

KEITH MYERS | The Kansas City Star
The Power & Light District, where restaurants were busy on Tuesday evening, is still viewed by city leaders as a long-term benefit to downtown despite Tuesday’s news.
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When the city in 2006 approved issuing $295 million in bonds for the downtown entertainment project, it was conceived as a self-sustaining venture. But a delayed opening, the economic downturn and higher-than-expected borrowing costs have meant that so far it has not generated enough revenue to cover debt payments.

“It will probably never fully cover itself,” acting City Manager Troy Schulte told The Kansas City Star in an interview. “We’ve built into all of our long-term projections the assumption of a $10 million to $15 million annual debt subsidy.”

Given Schulte’s estimate, to subsidize the district, developed by the Cordish Co. of Baltimore, city taxpayers would have to shell out at least an extra $230 million by the time the bonds are due in 2033.

Schulte said the subsidy would be built into future budgets, and he and City Councilwoman Deb Hermann said the project, which replaced acres of urban blight, was still a good investment for downtown.

The chief architects of the redevelopment plan, former Mayor Kay Barnes and former City Manager Wayne Cauthen, continue to support the project and are skeptical about the city’s new assumption.

“I would not assume that situation will continue into the future,” Barnes said. “Five or 10 years out, it may look very different and much closer to the earlier projections.”

And the Cordish executive in charge of the district said the company remains bullish on the project.

Schulte, who was not involved in the original Cordish negotiations, said that taxpayers still should be pleased with the investment.

He said much of the money went toward rebuilding crumbling downtown sewers and streets, and the project has greatly improved downtown’s reputation.

“20-20 hindsight is always good, but I’d tell taxpayers to come down and enjoy downtown, because you’re paying for it,” he said.

“The project has benefited the city enormously in a variety of ways and will continue to do so.”

Cauthen, who’s back in Colorado after losing the city manager job in November, was surprised that his successors at City Hall were calculating such dismal long-term financial returns.

“No disrespect to these guys, but I think it would be prudent to speak to the people who put the expectations together,” Cauthen said.

The former city manager said the arrival of a professional franchise at the Sprint Center, the opening of the Kauffman Center for the Performing Arts, a potential new convention hotel and several other unknown variables could mean more business at the Power & Light District and more revenues for the city.

“I agree with the assessment this project was the right thing to do,” Cauthen said. “You never would have had the NAACP in Kansas City the way downtown looked in 2003, or the Big 12 basketball tournament.”

Schulte said he hopes the project will beat the city’s latest projections.

“It’s my hope that an economic recovery and Cordish fully leasing the project will mean that subsidy number goes down,” he said.

The 511,000 square feet of retail space in the Power & Light District is now about 75 percent occupied, according to the city.

Rob Hunden, the Chicago consultant who prepared the revenue projections the city based its assumptions on in 2005, believes that big factors in the shortfall were the delayed opening and continuing vacancies.

The report by C.H. Johnson Consulting assumed that the development would be fully operational with 90 percent occupancy by March 2007 and that it would generate $17.7 million in sales-related tax revenues its first year. Instead, the first two businesses didn’t open until November 2007, and only about a dozen were open by spring 2008.

“The primary assumption going into the analysis was that it would lease up and be completed in the time we estimated, and neither of those things happened,” Hunden said. “The tenants who have opened have performed as projected; the problem is, not enough tenants have opened.”

For their part, city officials are not blaming Cordish for missing the financial projections. They assign the blame to the weak economy, higher-than-expected infrastructure costs and higher-than-expected borrowing costs, again, a factor of the national downturn.

“The deficit is not the result of Cordish,” Schulte said. “They continue to open more retail and restaurants in one of the worst economic conditions the city has ever faced.

“We simply built too much infrastructure on an uncertain revenue stream and optimistic assumptions about the global credit markets.”

Cordish estimated $212 million out of the $295 million in bond proceeds went toward rebuilding the infrastructure in the Power & Light development area. That figure, however, includes two city-owned underground parking garages specifically serving the project.

“This new public infrastructure, which traditionally would have been paid for out of public works, supports the entire downtown, and these expenditures absolutely had to be made if downtown was to continue to be viable,” Nick Benjamin, executive director of the Power & Light District, said in a statement.

The remainder of the bond proceeds went toward developing the project itself. Cordish officials have said their company has invested at least $150 million in the development.

Benjamin also said the project has generated far more tax revenues for the city than have been captured within the development itself for the purpose of repaying the bonds.

“If one includes all the incremental tax benefits that have accrued to the city from the decision to build the district … the Power & Light District is covering not only its own costs, but those of the rebuilt city infrastructure as well.”

Schulte agreed it would likely have cost the city about as much as the annual subsidy if it had issued general obligation bonds to do the infrastructure work.

But the district was touted as being a redevelopment project that would pay for itself, not a long-term obligation of the city.

“I probably would have sold it on the infrastructure component and talked about how a downtown that shut down at 5 p.m. is now almost a 24-hour operation,” Schulte observed.

The continuing subsidy should not require any future cuts in the city budget because, Schulte said, funding has been built into future budget calculations. Still, the subsidy subtracts from money that could be spent on other city needs.

“You might have $10 million or $15 million to do something else,” he said, “but then if you didn’t have the district you might continue to see businesses leave downtown, and there are costs associated with that.”

As for the Kansas City Council, the city manager believes the projected long-term subsidy should not be a surprise.

“I think they see it as an investment that will pay off, maybe not to the general fund, but from an overall community standpoint and to the benefit of downtown,” Schulte said.

Mayor Mark Funkhouser was on vacation and could not be reached for comment.

Hermann, who leads the council’s finance committee, said that while the city analyzed the original deal with “rose-colored glasses,” the project was still worthwhile.

She agreed with the city’s latest projection.

“Regardless of what the projections were, we need to make it a success,” Hermann said. “Over half of that money that was spent went to infrastructure.

“We were projecting just 100 percent coverage on the payments, and that was rose-colored glasses, but that doesn’t mean it was a bad project.

“We should have been more transparent, but then the economy went bad and we should have talked about where the money was going to come from.”

[Mojo Jojo]

Originally Posted by Saul Good

That post had nothing to do with the numbers being unrealistic. That post said that it's been great for the city, and I stand by that. The city went into this knowing that they were going to have to subsidize some of it. That doesn't make the district a failure.

The city is much better off now than it was 5 years ago. Without the P&L, this city doesn't sniff an All-Star game. Without the P&L, this city isn't even in the discussion for hosting a World Cup event.

The P&L District and the Legends Shopping Center are 2 of the best things this city has to offer.

The Chiefs and Royals both suck, and they are located out in the middle of nowhere. (How sad is it that they are on the short list of "positives" for the city.

Worlds of Fun and Oceans of Fun are fine, but they are in the middle of nowhere.

The casinos are fine, but they are in the middle of nowhere.

The Plaza is cool.

What else is there? If you take away P&L and the development going on around the Legends (Cabellas, Great Wolfe Lodge, Dave & Busters, the Speedway, Community America Ballpark, the Wizards' Stadium, Nebraska Furniture Mart, Chateau Avalon, Schlitterbahn, Shopping, Dining, etc.), you are left with an arena with no tenant in the middle of a ghost town, and a bunch of marginal activities (Plaza notwithstanding) in the middle of nowhere.

It is unfathomable to me that, out of everything that Kansas City has done wrong over the years, that you are trying to call out the Legends and the P&L district as failures.

But my original post had everything to do with the numbers, and what was sold to the tax payers. You saw it as an attack on an entertainment district. As I pointed out we all wanted this, but knew the numbers weren't real. Is it so wrong to hold the government and developer accountable for tax dollars? It seems KCK/Wyandotte County and The Legends developer understood their rules...AEG understood the rules...why not Cordish?

If Clark and Mr. Glass came back and asked for more tax dollars because they went over or didn't factor in certain things when they agreed to a price and signed the deal would you be so forgiving?

I think that an entertainment district can do many positives for a city, but history shows that it won't last at the current level.

[ChiefsCountry]

Originally Posted by billay

Nah I just think things could be better. For example Westport is 1000000X better than PNL but howcome you can bring your beer outside at PNL but not at Westport? It's bullshit how much the rules are changed for PNL.

Its bc the inside of PNL is private owned area where in Westport you are walking out into a Kansas City street.

[Saul Good]

Originally Posted by Mojo Jojo

But my original post had everything to do with the numbers, and what was sold to the tax payers. You saw it as an attack on an entertainment district. As I pointed out we all wanted this, but knew the numbers weren't real. Is it so wrong to hold the government and developer accountable for tax dollars? It seems KCK/Wyandotte County and The Legends developer understood their rules...AEG understood the rules...why not Cordish?

If Clark and Mr. Glass came back and asked for more tax dollars because they went over or didn't factor in certain things when they agreed to a price and signed the deal would you be so forgiving?

I think that an entertainment district can do many positives for a city, but history shows that it won't last at the current level.

Are you suggesting that the city didn't pony up for the Chiefs and Royals?

[Saul Good]

Originally Posted by ChiefsCountry

Its bc the inside of PNL is private owned area where in Westport you are walking out into a Kansas City street.

They also used to allow people to carry beers through the streets of Westport on Friday or Saturday nights. They roped off the bar area and charged $1 admission. Guess who complained about that. I'll give you a hint. Now, they complain about P&L.

[Mojo Jojo]

Originally Posted by Saul Good

Are you suggesting that the city didn't pony up for the Chiefs and Royals?

Actually it was the county. The city is looking to back out of their deal with the teams that was just a handshake not a true contract.
I'm just saying that if Clark and Mr. Glass wanted more because they didn't follow the agreement should the tax payer be on the hook for more money or should the owners?

[CHENZ A!]

blah blah blah, if you don't like P&L don't go there. I have crossover style, I kick it anywhere.

[Saul Good]

Originally Posted by Mojo Jojo

Actually it was the county. The city is looking to back out of their deal with the teams that was just a handshake not a true contract.
I'm just saying that if Clark and Mr. Glass wanted more because they didn't follow the agreement should the tax payer be on the hook for more money or should the owners?

The city vouched for the debt for the P&L. Period, end of story.

Everyone involved knew what the costs would be. If the city didn't agree to take on the overage, this never would have been built. The city is better off because it was.

[Mojo Jojo]

Originally Posted by Saul Good

The city vouched for the debt for the P&L. Period, end of story.

Everyone involved knew what the costs would be. If the city didn't agree to take on the overage, this never would have been built. The city is better off because it was.

So the city makes a bad deal out of panic and tax payers should just say OK?
In an earlier post you said I should complain about the schools, roads and City Council. Well I am complaining about the City Council, and maybe these overages could have been used to repair roads or upgrade schools. I hope you are happy that the tax payers are paying more and more so you have a place to go while the rest of the city has to cut back on resources...police, fire, waste pickup, schools/teachers and many other things.

By the way you still haven't answered my question about Clark and Mr. Glass.

[Dinny Bossa Nova]

Would anybody be interested in booking a traditional blues band in any of these joints for 15%?

PM me.

Dinny

[Saul Good]

Originally Posted by Mojo Jojo

So the city makes a bad deal out of panic and tax payers should just say OK?
In an earlier post you said I should complain about the schools, roads and City Council. Well I am complaining about the City Council, and maybe these overages could have been used to repair roads or upgrade schools. I hope you are happy that the tax payers are paying more and more so you have a place to go while the rest of the city has to cut back on resources...police, fire, waste pickup, schools/teachers and many other things.

By the way you still haven't answered my question about Clark and Mr. Glass.

The city didn't make a bad deal. The city made a deal that required spending a relatively small amount of money that benefits the entire city.

What's to answer about Clark Hunt and David Glass? There was an agreement in place to increase taxes in order to spend $425,000,000 of public money on the stadiums.

The P&L District had an agreement in place in which the city would be liable for the portion of the debt that couldn't be repaid by Cordish.

In both cases, the deals were kept. I will go on record as saying that the money spent on the P&L District in downtown Kansas City was a much better investment than the $425,000,000 of money spent on refurbishing a couple of stadiums in Raytown.

According to the article, $212 million out of the $295 million went toward rebuilding the infrastructure in the Power & Light development area. In other words, the city got $212,000,000 worth of upgrades to it's downtown excluding the businesses. You can't say the same thing for the stadium boondoggle.

[Extra Point]

Hey, Billay! What do you do for excitement, rub two sticks together? Keep your stick to yourself!

[Titty Meat]

Originally Posted by Iowanian

I think you have shit in your pants, but that's only because it's near where you keep your brains most of the time

Comig from a man who lives in a trailer park in Iowa this means alot.

[Iowanian]

Billaaaaaay's have SOULS!!!! MAD!!!

[Valiant]

Originally Posted by BWillie007

Honestly, I don't know what this dress code is. I've never been turned away. You can wear tshirts, jeans, shorts, hats, pretty much whatever. Out of any place I've ever been it has the most lenient dress codes of places that actually have dress codes. You ever been to the voodoo lounge? Much stricter dress code and there's much more if a cultural crowd to.

Used to go years back and I agree with Voodoo.. I do not have a reason why the Voodoo does not get critiqued for it..

[BWillie]

Originally Posted by |Zach|

Meh, its just business and politics. It just is what it is...it doesn't bother me that much. Some businesses are adapting just fine. More so P+L took a lot of the dbags out of Westport...I like the crowds there more now than I used to it also brings money in from people from JOCO and other suburbs who wouldn't come within 100 ft of Westport because they believe the myth that it is really dangerous.

Uhh...I've seen people literally get shot at in Westport in the summer. I don't know how the violence is now, but I can tell you before PNL it was terrible. I saw cops having to break up huge fights all the time. People getting arrested all over. PNL has much more people than Westport and at least from first glance, I'm sure there is less crime per capita there.